Understanding the Appraisal Process in Illinois
Real estate transactions can be confusing for those who are not frequently involved in these transactions, especially for first-time homebuyers. Whether you are buying or selling a home in Illinois, it is important to understand the home appraisal process. For buyers, the appraisal is a crucial step to obtaining financing for the home. Lenders need an appraisal to determine whether the home in question is worth what they are considering lending. An appraisal that comes in low can cause problems for the buyer and the seller.
The buyer may not be able to come up with the additional funds required to bridge the gap between the appraised value and the asking price. The sale could fall apart, hurting both the seller and the buyer. Sellers need a favorable appraisal that is close to the asking price, or they will be forced to lower the sale price or negotiate with the buyer. There are ways to deal with an unfavorable appraisal, both on the buyer and seller side. If you find yourself facing such an issue, speaking to an experienced Cook County, IL real estate attorney can be beneficial.
Preparing Your Home for a Successful Appraisal
If you are the seller, there are certain steps you can take to ensure your home receives a favorable appraisal. These steps include:
- Provide as much information as possible to the appraiser.
- Make sure there are no discrepancies between your real estate listing and the tax records.
- If you have remodeled the home, make sure you have copies of building permits for remodels or additions.
- Make sure the home and grounds are clean and well-maintained when the appraiser arrives.
- Have a file folder that details every unique feature of your home and property. Plats, deeds, surveys, floor plans, comparables in the area, neighborhood details, a list of upgrades, any energy-efficient or "green" features, and HOA documents should all be included.
- If your home has above-grade features, make sure the appraiser is aware of them.
- Interior and exterior photos and measurements must be taken by the appraiser.
If the buyer plans on obtaining an FHA loan, there are additional requirements for the appraisals. The home must be free of all known hazards and adverse conditions that could affect the occupant’s health and safety. The primary areas of inspection for an FHA appraisal include the crawl spaces, electrical systems, heating systems, mechanical systems, ventilation, lot grading, foundation, and roof.
The Appraisal from the Buyer’s Viewpoint
Buyers need an appraisal to determine whether they are overpaying. When buyers know the true value of the home, they are better equipped to negotiate more favorable terms. In some cases, if an appraisal comes in under the asking price, the buyer can negotiate with the seller to have certain improvements or repairs made to make up for the difference. Since appraisals are estimates of the property’s fair market value, they are reflective of the current real estate market conditions. All lenders require an appraisal to approve a mortgage loan to ensure the collateral is in line with the amount of the loan.
Timing is Important in the Appraisal Process
Appraisers use data that reflects recent real estate trends, but as volatile as the market can be, there can be changes between the time the contract is negotiated and the time the appraisal is performed. Both buyers and sellers should depend on their real estate attorney to guide them through the appraisal process, particularly if there are significant discrepancies between the asking price and the appraised price.
Contact a DuPage County, IL Real Estate Attorney
If you are planning on selling a home or buying a home, the process is likely to go much more smoothly when you have a Cook County, IL real estate attorney from Whitacre & Stefanczuk LTD. We are extremely communicative with our clients because we want them to feel comfortable through all of their real estate issues. We are active in the Polish community and speak fluent Polish. Call 773-622-6100 to schedule a free consultation.